London private equity buyout rate increases

Michael Bow
Follow Michael
SMALL London businesses saw a surge in interest from private equity groups last year, reversing a run of depressing years for buyout activity in the capital, according to figures out yesterday.

The number of London deals completed worth between £5m to £50m bracket increased by 38 per cent in 2012 versus 2011. Value also increased by almost a quarter, up to £1.3bn total, according to numbers from Lloyds’ private equity arm LDC.

It makes happy reading for small business bosses hoping to tap private equity funds, with a breakdown showing 16 more buyout deals and ten more expansion deals taking place – but London still struggled on bigger priced deals.

Trades in the higher £50m and £150m bracket failed to match 2011, the Unquote-LDC Regional Mid-Market Barometer shows. with overall deal value down £56m and the numbers of deals flatlining.

“Last year London’s mid-market deal flow is a tale of two deal brackets,” said Daniel Sasaki, managing director of LDC’s London team. “Factors behind this contrasting performance are likely to have been...the greater difficulty of accessing debt higher up the deal value chain.”